Overview
Today, Stride protocol has integrated Injective, enabling users to liquid stake Injective’s native token, INJ, for the first time.
This marks a new chapter in the history of INJ. Through liquid staking, a plethora of new use-cases have been unlocked. As a result, stINJ will likely begin to proliferate across the Cosmos ecosystem in an unprecedented way, increasing awareness of the Injective blockchain.
As with all blockchains onboarded by Stride protocol, INJ stakers will receive an STRD airdrop, to introduce them to the Stride DAO and give them a voice in its governance.
Injective background
Over the past year, Injective has been rapidly gaining prominence in the Cosmos ecosystem. Injective is a lightning-fast layer one blockchain, optimized for building DeFi applications. It is the only blockchain in the Cosmos with an onchain order book module and self-executing smart contracts. The onchain order book supports spot and perpetual futures trading, and can be accessed from several trading frontends, Helix being the most popular. Injective’s onchain order book has become the most liquid in all of crypto, and it now has spot pairs for many important Cosmos tokens, such as ATOM, STRD, and SOMM. In addition, two well-known Cosmos apps, Astroport and WhiteWhale, recently launched on Injective, and several more apps are planning to launch.
In recent months, INJ price appreciation has outperformed most other tokens. INJ market cap has swelled to over $435 million, putting INJ easily within the top 110 tokens on CoinGecko, and making it one of the biggest Cosmos tokens.
However, in spite of Injective’s growing prominence and market cap, INJ has limited use-cases throughout Cosmos DeFi. Given the relative dearth of large and exciting Cosmos-native tokens, it is unfortunate that INJ is being under-utilized in Cosmos DeFi. One reason for this is INJ’s high staking reward. At 16.5% APR, it’s hard for DeFi use-cases to compete!
Without liquid staking, using a token in DeFi requires that it be unstaked, thereby forfeiting its staking reward. But with liquid staking, a token can both participate in DeFi and earn its staking reward, lowering the barrier to DeFi usage. Therefore, stINJ unlocks the potential of INJ for wide-spread use in Cosmos DeFi.
stINJ use-cases
stINJ will likely find many use-cases in Cosmos DeFi.
First of all, an stINJ-INJ Astroport pool has appeared on the Astroport’s Injective deployment, with initial liquidity stemming from the community.
Next, with this deep liquidity in place, stINJ will likely be approved as a collateral token on Demex. Demex is a suite of DeFi apps on the Carbon blockchain; its money market is called Nitron. Nitron was quick to support many of Stride’s other liquid staked tokens.
After that, it’s possible that the money market Umee may support stINJ as collateral. It’s also possible that many other money markets and CDP stablecoin protocols throughout the Cosmos may support stINJ, such as Shade, Nolus, Harbor, and Kryptonite.
In addition, it’s likely that vault-creation apps throughout the Cosmos will provide use cases for stINJ. Quasar is already live, and Ion DAO / IBCX and Nebula are expected to launch in the next six months. Crypto ETFs / index tokens will be issued by these apps, and given the prominence of Injective it’s likely that stINJ will be included as a constituent token.
Lastly, there are a number of more uncertain potential use-cases for stINJ. It may be used as a staking token for Alliance blockchains, as collateral for a perpetual futures protocol, or as a currency for trading NFTs. Also, it’s possible that an index token containing stINJ finds traction in one or several of these use-cases.
None of these use-cases are economically viable at scale for unstaked INJ, due to the hidden fee of forfeited staking rewards. But with stINJ, staking rewards are retained. Through liquid staking, INJ has the potential to become a very useful and popular token in Cosmos DeFi.
Airdrop
It’s customary for the stakers of on-boarded chains to receive a STRD airdrop, and Injective is no exception! As a reminder, here are the previously announced airdrop details:
Snapshot: Monday, October 24th at 17:08 UTC (Injective block 17469200)
Min threshold: 25 INJ, max threshold: 26,500 INJ
STRD to be airdropped: 100,000
To explain, stakers will be able to claim STRD pro rata their staked amount. Addresses with less than 25 INJ staked at snapshot are excluded, because the airdrop amount would be negligible. Addresses with more than 26,500 INJ staked are included, but only up to that amount.
The purpose of airdropping STRD is to distribute the STRD token supply, which is an important aspect for the decentralization of the Stride blockchain. What’s more, giving STRD to INJ stakers introduces them to Stride governance, and allows them to have a voice. This is important, because Stride governance makes decisions that affect the Injective blockchain, namely selecting Injective host-chain validators.
The airdrop to INJ stakers will become claimable shortly.
The future
Stride’s on-boarding of Injective and the Injective community’s efforts to provide initial liquidity for the stINJ pool represent the beginning of a meaningful collaboration. Stride protocol has added another liquid staked token to the long list of LSTs it offers, and Injective will further increase the exposure of stINJ throughout the Cosmos.
Moving forward, we can expect the significant usage of Injective from Stride protocol’s LSTs. As a chain optimized for DeFi applications, it would be fitting for the Injective community to develop further use-cases for stINJ.
Liquid staking continues to unlock the huge potential of Cosmos DeFi!